Supplemental Guarantor Information

At July 31, 2017, our 100%-owned subsidiary, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), has issued the following outstanding Senior Notes (amounts in thousands):



	Original amount issued and amount outstanding
8.91% Senior Notes due 2017	$	400,000
4.0% Senior Notes due 2018	$	350,000
6.75% Senior Notes due 2019	$	250,000
5.875% Senior Notes due 2022	$	419,876
4.375% Senior Notes due 2023	$	400,000
5.625% Senior Notes due 2024	$	250,000
4.875% Senior Notes due 2025	$	350,000
4.875% Senior Notes due 2027	$	450,000
0.5% Exchangeable Senior Notes due 2032	$	287,500

The obligations of the Subsidiary Issuer to pay principal, premiums, if any, and interest are guaranteed jointly and severally on a senior basis by us and substantially all of our 100%-owned home building subsidiaries (the “Guarantor Subsidiaries”). The guarantees are full and unconditional. Our non-home building subsidiaries and several of our home building subsidiaries (together, the “Nonguarantor Subsidiaries”) do not guarantee these Senior Notes. The Subsidiary Issuer generates no operating revenues and does not have any independent operations other than the financing of our other subsidiaries by lending the proceeds from the above-described debt issuances. The indentures under which the Senior Notes were issued provide that any of our subsidiaries that provide a guarantee of our obligations under the Credit Facility will guarantee the Senior Notes. The indentures further provide that any Guarantor Subsidiary may be released from its guarantee so long as (i) no default or event of default exists or would result from release of such guarantee; (ii) the Guarantor Subsidiary being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of our most recent fiscal quarter; (iii) the Guarantor Subsidiaries released from their guarantees in any fiscal year comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of our consolidated net worth as of the end of our most recent fiscal quarter; (iv) such release would not have a material adverse effect on our and our subsidiaries’ home building business; and (v) the Guarantor Subsidiary is released from its guaranty under the Credit Facility. If there are no guarantors under the Credit Facility, all Guarantor Subsidiaries under the indentures will be released from their guarantees.

During the preparation of the Form 10-Q for the three months ended January 31, 2017, we identified an immaterial revision that was necessary to certain columns in the consolidating statements for the year ended October 31, 2016. The revision impacted the Guarantor and Nonguarantor Subsidiaries columns in the Consolidating Statement of Operations and Comprehensive Income for the year ended October 31, 2016 and the Nonguarantor Subsidiaries and Eliminations columns in the Condensed Consolidating Balance Sheet as of October 31, 2016, by offsetting amounts. Corresponding changes to the Consolidating Statement of Cash Flows for the year ended October 31, 2016 were also made. The revision had no impact on any consolidated totals of such consolidating statements.

Accordingly, the Consolidating Statements of Operations and Comprehensive Income and of Cash Flows for the year ended October 31, 2016 and the Condensed Consolidating Balance Sheet as of October 31, 2016 have been revised to reflect the immaterial adjustment described above and are included hereunder.

Separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented because management has determined that such disclosures would not be material to investors.

Supplemental consolidating financial information of Toll Brothers, Inc., the Subsidiary Issuer, the Guarantor Subsidiaries, the Nonguarantor Subsidiaries, and the eliminations to arrive at Toll Brothers, Inc. on a consolidated basis is presented below ($ amounts in thousands).

Condensed Consolidating Balance Sheet at July 31, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		784,527	161,668	—		946,195
Restricted cash and investments						781			781
Inventory					7,378,098	255,470			7,633,568
Property, construction and office equipment, net					164,156	15,320			179,476
Receivables, prepaid expenses and other assets					354,597	252,406	(70,479	)	536,524
Mortgage loans held for sale						89,419			89,419
Customer deposits held in escrow					91,378	2,473			93,851
Investments in unconsolidated entities					66,405	447,860			514,265
Investments in and advances to consolidated entities	4,514,891		3,211,923		91,740	128,433	(7,946,987	)	—
Deferred tax assets, net of valuation allowances	134,857								134,857
	4,649,748		3,211,923		8,930,901	1,353,830	(8,017,466	)	10,128,936
LIABILITIES AND EQUITY
Liabilities
Loans payable					612,407	7,167			619,574
Senior notes			3,145,380				3,525		3,148,905
Mortgage company loan facility						57,921			57,921
Customer deposits					395,407	18,738			414,145
Accounts payable					274,350	2,416			276,766
Accrued expenses	151		46,233		593,862	393,208	(77,333	)	956,121
Advances from consolidated entities					2,404,026	685,740	(3,089,766	)	—
Income taxes payable	116,883								116,883
Total liabilities	117,034		3,191,613		4,280,052	1,165,190	(3,163,574	)	5,590,315
Equity
Stockholders’ equity
Common stock	1,779				48	3,006	(3,054	)	1,779
Additional paid-in capital	713,624		49,400			93,734	(143,134	)	713,624
Retained earnings (deficit)	4,294,808		(29,090	)	4,650,801	85,993	(4,707,704	)	4,294,808
Treasury stock, at cost	(474,665	)							(474,665	)
Accumulated other comprehensive loss	(2,832	)							(2,832	)
Total stockholders’ equity	4,532,714		20,310		4,650,849	182,733	(4,853,892	)	4,532,714
Noncontrolling interest						5,907			5,907
Total equity	4,532,714		20,310		4,650,849	188,640	(4,853,892	)	4,538,621
	4,649,748		3,211,923		8,930,901	1,353,830	(8,017,466	)	10,128,936

Condensed Consolidating Balance Sheet at October 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		583,440	50,275	—		633,715
Restricted cash and investments	11,708					19,583			31,291
Inventory					6,896,205	457,806	(44	)	7,353,967
Property, construction and office equipment, net					153,663	15,913			169,576
Receivables, prepaid expenses and other assets	77				319,319	299,978	(36,616	)	582,758
Mortgage loans held for sale						248,601			248,601
Customer deposits held in escrow					50,079	2,978			53,057
Investments in unconsolidated entities					101,999	394,412			496,411
Investments in and advances to consolidated entities	4,112,876		2,741,160		20,519	90,671	(6,965,226	)	—
Deferred tax assets, net of valuation allowances	167,413								167,413
	4,292,074		2,741,160		8,125,224	1,580,217	(7,001,886	)	9,736,789
LIABILITIES AND EQUITY
Liabilities
Loans payable					871,079				871,079
Senior notes			2,683,823				10,549		2,694,372
Mortgage company loan facility						210,000			210,000
Customer deposits					292,794	16,305			309,099
Accounts payable					280,107	1,848			281,955
Accrued expenses			32,559		610,958	469,527	(40,744	)	1,072,300
Advances from consolidated entities					1,737,682	799,082	(2,536,764	)	—
Income taxes payable	62,782								62,782
Total liabilities	62,782		2,716,382		3,792,620	1,496,762	(2,566,959	)	5,501,587
Equity
Stockholders’ equity
Common stock	1,779				48	3,006	(3,054	)	1,779
Additional paid-in capital	728,464		49,400			6,734	(56,134	)	728,464
Retained earnings (deficit)	3,977,297		(24,622	)	4,332,556	67,805	(4,375,739	)	3,977,297
Treasury stock, at cost	(474,912	)							(474,912	)
Accumulated other comprehensive loss	(3,336	)							(3,336	)
Total stockholders’ equity	4,229,292		24,778		4,332,604	77,545	(4,434,927	)	4,229,292
Noncontrolling interest						5,910			5,910
Total equity	4,229,292		24,778		4,332,604	83,455	(4,434,927	)	4,235,202
	4,292,074		2,741,160		8,125,224	1,580,217	(7,001,886	)	9,736,789

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the nine months ended July 31, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					3,699,032		224,120		(136,001	)	3,787,151
Cost of revenues					2,896,053		145,229		(54,811	)	2,986,471
Selling, general and administrative	45		3,010		461,722		54,955		(79,549	)	440,183
	45		3,010		3,357,775		200,184		(134,360	)	3,426,654
Income (loss) from operations	(45	)	(3,010	)	341,257		23,936		(1,641	)	360,497
Other:
Income from unconsolidated entities					11,224		101,050				112,274
Other income – net	7,049				21,655		9,482		1,607		39,793
Intercompany interest income			116,164		48		3,370		(119,582	)	—
Interest expense			(120,178	)	(3,370	)	(1,328	)	124,876		—
Income from subsidiaries	505,560				129,486				(635,046	)	—
Income (loss) before income taxes	512,564		(7,024	)	500,300		136,510		(629,786	)	512,564
Income tax provision (benefit)	168,947		(2,556	)	182,055		49,674		(229,173	)	168,947
Net income (loss)	343,617		(4,468	)	318,245		86,836		(400,613	)	343,617
Other comprehensive income	504										504
Total comprehensive income (loss)	344,121		(4,468	)	318,245		86,836		(400,613	)	344,121

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the nine months ended July 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					3,123,436	282,207		(91,586	)	3,314,057
Cost of revenues					2,451,554	134,952		(12,208	)	2,574,298
Selling, general and administrative	49		2,857		402,049	53,399		(73,234	)	385,120
	49		2,857		2,853,603	188,351		(85,442	)	2,959,418
Income (loss) from operations	(49	)	(2,857	)	269,833	93,856		(6,144	)	354,639
Other:
Income from unconsolidated entities					16,168	6,586				22,754
Other income – net	7,106				21,504	14,164		700		43,474
Intercompany interest income			109,347					(109,347	)	—
Interest expense			(113,514	)		(1,277	)	114,791		—
Income from subsidiaries	413,810				106,305			(520,115	)	—
Income (loss) before income taxes	420,867		(7,024	)	413,810	113,329		(520,115	)	420,867
Income tax provision (benefit)	153,150		(2,705	)	159,358	43,645		(200,298	)	153,150
Net income (loss)	267,717		(4,319	)	254,452	69,684		(319,817	)	267,717
Other comprehensive income	23				31					54
Total comprehensive income (loss)	267,740		(4,319	)	254,483	69,684		(319,817	)	267,771

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended July 31, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,459,115		94,422		(50,628	)	1,502,909
Cost of revenues					1,128,705		65,595		(18,272	)	1,176,028
Selling, general and administrative	21		1,045		163,074		20,083		(29,011	)	155,212
	21		1,045		1,291,779		85,678		(47,283	)	1,331,240
Income (loss) from operations	(21	)	(1,045	)	167,336		8,744		(3,345	)	171,669
Other:
Income from unconsolidated entities					2,746		17,179				19,925
Other income – net	2,367				9,389		673		(449	)	11,980
Intercompany interest income			41,111		48		1,224		(42,383	)	—
Interest expense			(42,433	)	(3,370	)	(374	)	46,177		—
Income from subsidiaries	201,228				25,078				(226,306	)	—
Income (loss) before income taxes	203,574		(2,367	)	201,227		27,446		(226,306	)	203,574
Income tax provision (benefit)	55,011		(839	)	71,787		9,462		(80,410	)	55,011
Net income (loss)	148,563		(1,528	)	129,440		17,984		(145,896	)	148,563
Other comprehensive income	167										167
Total comprehensive income (loss)	148,730		(1,528	)	129,440		17,984		(145,896	)	148,730

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended July 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,248,474	56,457		(34,997	)	1,269,934
Cost of revenues					973,493	24,085		(6,162	)	991,416
Selling, general and administrative	27		937		141,519	18,198		(25,697	)	134,984
	27		937		1,115,012	42,283		(31,859	)	1,126,400
Income (loss) from operations	(27	)	(937	)	133,462	14,174		(3,138	)	143,534
Other:
Income (loss) from unconsolidated entities					5,835	(837	)			4,998
Other income – net	2,395				8,109	3,625		992		15,121
Intercompany interest income			36,370					(36,370	)	—
Interest expense			(37,800	)		(714	)	38,514		—
Income from subsidiaries	161,285				13,880			(175,165	)	—
Income (loss) before income taxes	163,653		(2,367	)	161,286	16,248		(175,167	)	163,653
Income tax provision (benefit)	58,170		(911	)	62,086	6,249		(67,424	)	58,170
Net income (loss)	105,483		(1,456	)	99,200	9,999		(107,743	)	105,483
Other comprehensive income	155									155
Total comprehensive income (loss)	105,638		(1,456	)	99,200	9,999		(107,743	)	105,638

Consolidating Statement of Operations and Comprehensive Income (Loss) for the fiscal year ended October 31, 2016



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					4,984,356	361,685		(176,533	)	5,169,508
Cost of revenues					3,919,729	288,044		(63,708	)	4,144,065
Selling, general and administrative	75		3,809		558,822	74,328		(101,652	)	535,382
	75		3,809		4,478,551	362,372		(165,360	)	4,679,447
Income (loss) from operations	(75	)	(3,809	)	505,805	(687	)	(11,173	)	490,061
Other:
Income from unconsolidated entities					16,913	23,835				40,748
Other income - net	9,501				27,873	17,456		3,388		58,218
Intercompany interest income			145,828					(145,828	)	—
Interest expense			(151,410	)		(2,203	)	153,613		—
Income from consolidated subsidiaries	579,601				29,010			(608,611	)	—
Income (loss) before income taxes	589,027		(9,391	)	579,601	38,401		(608,611	)	589,027
Income tax provision (benefit)	206,932		(3,299	)	203,614	13,490		(213,805	)	206,932
Net income (loss)	382,095		(6,092	)	375,987	24,911		(394,806	)	382,095
Other comprehensive (loss) income	(858	)			31					(827	)
Total comprehensive income (loss)	381,237		(6,092	)	376,018	24,911		(394,806	)	381,268

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by (used in) operating activities	140,483		19,726		(165,502	)	439,059		(8,904	)	424,862
Cash flow (used in) provided by investing activities:
Purchase of property and equipment - net					(22,797	)	396				(22,401	)
Investment in unconsolidated entities					(3,471	)	(116,243	)			(119,714	)
Return of investments in unconsolidated entities					57,068		82,278				139,346
Investment in foreclosed real estate and distressed loans							(688	)			(688	)
Return of investments in foreclosed real estate and distressed loans							12,429				12,429
Acquisition of a business					(85,183	)					(85,183	)
Investment paid - intercompany					(45,000	)			45,000		—
Intercompany advances	(82,881	)	(470,763	)					553,644		—
Net cash (used in) provided by investing activities	(82,881	)	(470,763	)	(99,383	)	(21,828	)	598,644		(76,211	)
Cash flow (used in) provided by financing activities:
Net proceeds from issuance of senior notes			455,483								455,483
Debt issuance costs for senior notes			(4,446	)							(4,446	)
Proceeds from loans payable					125,068		958,404				1,083,472
Principal payments of loans payable					(402,596	)	(1,110,482	)			(1,513,078	)
Proceeds from stock-based benefit plans	57,958										57,958
Excess tax benefits from stock-based compensation	1,172										1,172
Purchase of treasury stock	(90,716	)									(90,716	)
Dividends paid	(26,016	)									(26,016	)
Investment received intercompany							45,000		(45,000	)	—
Intercompany advances					743,500		(198,760	)	(544,740	)	—
Net cash (used in) provided by financing activities	(57,602	)	451,037		465,972		(305,838	)	(589,740	)	(36,171	)
Net increase in cash and cash equivalents	—		—		201,087		111,393		—		312,480
Cash and cash equivalents, beginning of period	—		—		583,440		50,275		—		633,715
Cash and cash equivalents, end of period	—		—		784,527		161,668		—		946,195

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	71,539		17,333		(461,637	)	61,008		(13,496	)	(325,253	)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment — net					(22,623	)	(657	)			(23,280	)
Sale and redemption of marketable securities							10,000				10,000
Investments in unconsolidated entities					(2,057	)	(38,570	)			(40,627	)
Return of investments in unconsolidated entities					26,486		8,283				34,769
Investment in foreclosed real estate and distressed loans							(964	)			(964	)
Return of investments in foreclosed real estate and distressed loans							34,601				34,601
Dividend received – intercompany					5,000				(5,000	)	—
Intercompany advances	249,606		(17,298	)					(232,308	)	—
Net cash provided by (used in) investing activities	249,606		(17,298	)	6,806		12,693		(237,308	)	14,499
Cash flow (used in) provided by financing activities:
Debt issuance costs for senior notes			(35	)							(35	)
Proceeds from loans payable					550,000		1,206,528				1,756,528
Debt issuance costs for loans payable					(3,936	)					(3,936	)
Principal payments of loans payable					(506,559	)	(1,181,528	)			(1,688,087	)
Proceeds from stock-based benefit plans	5,336										5,336
Excess tax benefits from stock-based compensation	1,131										1,131
Purchase of treasury stock	(327,612	)									(327,612	)
Receipts related to noncontrolling interest							290				290
Dividend paid – intercompany							(5,000	)	5,000		—
Intercompany advances					(66,039	)	(179,765	)	245,804		—
Net cash (used in) provided by financing activities	(321,145	)	(35	)	(26,534	)	(159,475	)	250,804		(256,385	)
Net decrease in cash and cash equivalents	—		—		(481,365	)	(85,774	)	—		(567,139	)
Cash and cash equivalents, beginning of period	—		—		783,599		135,394		—		918,993
Cash and cash equivalents, end of period	—		—		302,234		49,620		—		351,854

Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2016



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by (used in) operating activities	60,465		14,768		105,709		(64,386	)	32,215		148,771
Cash flow provided by (used in) investing activities:
Purchase of property and equipment — net					(27,835	)	(591	)			(28,426	)
Sale and redemption of marketable securities							10,000				10,000
Investment in unconsolidated entities					(2,637	)	(67,018	)			(69,655	)
Return of investments in unconsolidated entities					32,857		14,949				47,806
Investment in distressed loans and foreclosed real estate							(1,133	)			(1,133	)
Return of investments in distressed loans and foreclosed real estate							49,619				49,619
Dividends received intercompany					5,000				(5,000	)	—
Investment paid intercompany					(5,000	)			5,000		—
Intercompany advances	323,207		(14,733	)					(308,474	)	—
Net cash provided by (used in) investing activities	323,207		(14,733	)	2,385		5,826		(308,474	)	8,211
Cash flow (used in) provided by financing activities:
Debt issuance costs for senior notes			(35	)							(35	)
Proceeds from loans payable					550,000		1,893,496				2,443,496
Debt issuance costs for loans payable					(4,868	)					(4,868	)
Principal payments of loans payable					(714,089	)	(1,783,496	)			(2,497,585	)
Proceeds from stock-based benefit plans	6,986										6,986
Excess tax benefits from stock-based compensation	2,114										2,114
Purchase of treasury stock	(392,772	)									(392,772	)
Receipts related to noncontrolling interest							404				404
Dividends paid intercompany							(5,000	)	5,000		—
Investment received intercompany							5,000		(5,000	)	—
Intercompany advances					(139,296	)	(136,963	)	276,259		—
Net cash (used in) provided by financing activities	(383,672	)	(35	)	(308,253	)	(26,559	)	276,259		(442,260	)
Net decrease in cash and cash equivalents	—		—		(200,159	)	(85,119	)	—		(285,278	)
Cash and cash equivalents, beginning of period	—		—		783,599		135,394		—		918,993
Cash and cash equivalents, end of period	—		—		583,440		50,275		—		633,715